RBI scraps charges for RTGS and NEFT transactions

Mumbai: In an effort to boost digital payments, the Reserve Bank of India (RBI) on Thursday scrapped charges levied on Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) transactions.

At present, the RBI levies minimum charges on banks for transactions routed through its RTGS system meant for large-value (Rs 2 lakh and above) instantaneous fund transfers and NEFT System for other fund transfers (below Rs 2 lakh). In turn, banks levy charges on their customers.

"In order to provide an impetus to digital funds movement, it has been decided to do away with the charges levied by the Reserve Bank for transactions processed in the RTGS and NEFT systems," said the central bank in a statement.

"Banks will be required, in turn, to pass these benefits to their customers. Instructions to banks in this regard will be issued within a week," it said.

The RBI has also decided to set up a committee to examine the entire gamut of automated teller machines (ATM) charges and fees. Headed by Chief Executive Officer of the Indian Banks' Association (IBA), the committee will submit its recommendations within two months of its first meeting.

The composition and terms of reference will be issued within a week.

Usage of ATMs by the people has grown significantly since the demonetisation of Rs 500 and Rs 1,000 banknotes of previous series in November 2016. However, there have been persistent demands to lower the ATM charges.